BEIJING (Reuters) - China's factories likely cranked up activity for the 14th straight month in September as the country's year-long building boom and higher prices generate hearty profits, though the pace of growth may have eased slightly from August.

The official manufacturing Purchasing Managers' Index (PMI) on Sunday is expected to come in at 51.5 for September, dipping marginally from August's 51.7, according to a median forecast of 24 economists polled by Reuters.

Profit growth at Chinese industrial firms accelerated in August at the fastest monthly pace in four years due to higher commodity prices, data showed on Wednesday.

Steel mills, in particular, continue to run at full tilt to cash in on fat profit margins and build up inventories ahead of expected government curbs on production to reduce choking air pollution over the winter.[IRONORE/]

Worries about a sharp drop in demand in coming months have seen China iron ore futures plunge more than 20 percent since August, though steel prices have continued to rise.

MOMENTUM

Bolstered by manufacturing and a hot property market, China's economy grew by a faster-than-expected 6.9 percent in the first half of 2017, and looks set to easily meet the government's full-year target of around 6.5 percent.

But there are signs that momentum is slowly starting to fade.

August data from industrial output to investment and retail sales was softer than expected, which many analysts attributed to a rise in borrowing costs this year as the government tries to reduce the risks from a rapid build-up in debt.

A flurry of government measures to cool soaring housing prices also appear to be tempering break-neck growth in the property sector, a key economic driver, though underlying demand for homes remains healthy.

Still, China watchers can't agree on how much progress the government is making in its overall debt "derisking" battle, and the extent to which it may be impacting the broader economy.

A "Beige Book" survey of thousands of Chinese firms by China Beige Book International (CBB) pointed to a continued over-reliance on cheap, easy credit.

"It is a serious error to believe the current, impressive level of corporate performance is occurring despite true deleveraging," CBB said, adding that borrowing by Chinese companies was the second-highest in four years in the third quarter while lending rates fell after rising in the previous quarter.

"If 2018 sees actual tightening, it will be far more traumatic to firms than most analysts realize."

The focus is now on the upcoming Communist Party Congress in mid-October, a once-every-five-years meeting where new leaders are appointed and the government's key political and economic initiatives are laid out, though details are usually not announced until much later.

If growth does start to cool amid the tightening cycle, markets will be looking for signs that the government is comfortable with a slower pace of expansion, rather than jump in with more debt-fueled stimulus as it has often done in the past.

Economists expect the findings of a private survey on China's factory activity on Monday will be similar to the official reading, pointing to softer growth but not a sharp slump.

They predict the private Caixin/Markit Manufacturing Purchasing Managers' index (PMI) will dip slightly to 51.5 in September from 51.6 in August.

The official PMI survey and the Caixin PMI will be published on Sept. 30, along with a similar official survey covering the services sector. Caixin's services PMI will be released on Oct. 9.